The Urethane Blog

Middle East Urethanes Update

Mixed chemical supply outlook as trade flow pattern enhances in Mideast

Author: Felicia Loo


With new supply capacity set to be installed in China, the availability of toluene diisocyanate (TDI) cargoes in the Middle East is expected to improve, thus diminishing the need for buyers to stock up on cargoes in anticipation of a possible supply crunch due to unplanned plant outages.

The supply of polyols cargoes is also expected to improve in 2021 with new capacity set to be added in Asia and Europe.

With polyols being used as co-feedstocks along with TDI in the production of polyurethane (PU) foams, the easy availability of polyols is further likely to help TDI demand patterns stabilise.

Meanwhile, demand for polymeric diphenyl diisocyanate (PMDI) is expected to follow a different trajectory in 2021, with the coronavirus pandemic having exacerbated a long-running slowdown in the Middle East construction industry, which absorbs the bulk of PMDI cargoes in the market.

While the supply for PMDI is also expected to improve in 2021, the underlying weakness in demand means that overall market activity is likely to remain stagnant.